The jewellery trade and industry has taken a hit. The global economic meltdown, the winds of recession, the slump in diamond and jewellery exports, massive lay-offs, closure of factories (SEEPZ, Surat), the volatile prices of gold and, most importantly, the dampened sentiment of the consuming class (especially for non-essentials like jewellery) have adversely impacted this sector.
And as if these were not enough, the fear psychosis created by the recent terror attacks in Mumbai has further dampened sentiments.
We cannot of course sit down and cry about the gloom and doom. The time is for action – as the saying goes, when the going gets tough, the tough get going. We need to leverage the goodwill and strengths we have and carryon. Abhilasha Kale spoke to industry players and experts and asked them…
(Small and Medium size enterprises), manufacturers,
and wholesalers are feeling the immediate pinch as the
dollar has strengthened (against the rupee) to Rs. 50.
America, which consumes nearly 45% of diamonds. Has
been hit by economic problems and that too during the
festive season. This is also due to the fact that their
major exposure has been to a particular market the diamond
rotation is of 150 + days, so the previous cycle payment
has been affected and current sales too are affected,
and the future is uncertain. Whilst this may all be
true to an extent, the fact also remains that you have
to weather cyclic business variations. Now in this time
of economic crisis, Brands would be stretched to think
innovatively stretch the rupee, find out what the consumer
really needs and see how they can provide it at a cost
that is acceptable to the consumers."
The issue of survival than sustenance holds a prime position
in the current economic meltdown. In this scenario, will "wait
and watch’ policy be the right Move? Or could you do something
to Minimise the severity of the economic disaster?
In tough times, studying the success stories of others or understanding "industry experts’ opinions is a great source of inspiration and learning. Such understanding helps you to evaluate your business.
We spoke to industry players and experts on various aspects of the) jewellery trade, and gathered various workable approaches to ensuring survival and prosperity in the long run.
In the following story we see how staff training, technology, design and marketing and promotional initiatives have to be leveraged, especially in troubled times.
Jewellery is one of the industries which require constant touch with customers to survive or thrive. In troubled times ¬as right now n right and optimum use of capital is necessary to connect with consumers. In the absence of a healthy customer relationship, it is possible for you to lose some customer base. This loss can be greater than imagined. Though Indians love for jewellery will never allow the industry to die, current scenario has made consumer extra cautious when it comes to spending.
But does that mean one stops marketing and promotional .activity, stops connecting with the consumer? The answer is a clear NO. Unfortunately, advertising and promotional programmes/or events are first to face the axe for reasons of "cost savings." "What’s the use of advertising and marketing?" is the common refrain from many players in the jewellery trade, not realising that these are the times when communication with consumers is most crucial.
Hammer Plus Managing Director Suchita Khandwala has decided
to go against the tide. The company has come up with increased
number of ads this year and also encouraged retailers to do
it locally and share the cost of their related local ads.
Moreover, it is not mandatory that publicity campaigns should include ads only in print or electronic media. In other words, there are other avenues too; one needs to invest time and thought. Sohil Kothari, Director of Fine Jewellery, pursues innovative and cost-efficient ways to reach out to customers like tie-ups with premium restaurants, web sites and other top brands, and also regular activities like launch of new collections, direct mailers, and consumer offers. "For retailers, it is more to do with keeping the brand at top of the mind re-call of their consumers." explains Kothari.
Navin Sadrangani, Director at Nyuz, a jewellery retail service provider, looks at promotional programmes as trust-building exercises. It is the most important factor that brings old as well as new customers to a store. "There are other ways like internal signage, visual merchandising, direct mailers, and coop associations with leading companies that promote trust … all of this has to be used effectively and efficiently."
Ashok Minawala, Chairman of All India Gem and Jewellery Trade Federation (GJF), believes this is the most appropriate time to keep customers informed of the store and new products as the message is heard more effectively in a period of slowdown. He recommends joint advertising campaigns which will give a larger exposure to a group of jewellers in a city or Locality.
Expressing faith in Minawala’s ideas Subhash Bhola thinks
healthy and strong relationships are the best bet in any situation.
Bhola contacted 30 persons (some old customers, some potential
ones) with whom he had lost contact since last two three years.
To his surprise, he managed to turn some of them into customers.
Anaggh Desai suggests that marketing needs to change from advertising to catchment driven Bft (Below the Line) activities to attract consumers. BTL sales promotion programmes are cost effective. They may include events, consumer offers, direct mailers, tie-ups with other brands, etc.
Understanding consumer mindset
This emotional connect lends an opportunity to a company to understand the consumers’ mindset, lifestyle, taste and purchasing patterns. It helps to identify consumer trends, which guarantees jewellers that he will never go out of customer’s mind. C Ravishankar, Manager, Strategic and Commercial Intelligence, KPMG puts forward a simple activity – that is, to develop an experimental part of the store where a jeweller can tryout different and newer designs. Exhibitions and fairs, jewellery magazines, etc. are also useful tools to keep abreast of the changes.
Navin Sadrangani considers that updates on customer track record of purchases through a customized loyalty program monitoring allows each store to know the customers line of purchases, frequency of purchases, kind of jewellery preferred, references that he has given, etc. Such a study is more possible through direct offers and personalised proposals than advertising and promotions. Understanding consumer demands and then planning accordingly on such inventories according to the season around the year holds the key.
To achieve this end, Ashok Minawala says jewellers should continue to do events at his store, create new lightweight products, and improve service and marketing plans. "Try to see the stow-moving stocks and change them to fresh, acceptable collections, slow down new purchases and stop overtrading," adds Minawala.
Employees: Best asset to invest
A bunch of quality people is your best tangible asset. An employee works as a medium between you and your costumer. In the absence of proper training and product knowledge this asset may turn into a liability for your company. Motivation, recognition, right remuneration and skill – enhancement training are the factors that promise well-groomed staff with a result-oriented attitude. Such personnel win consumer confidence and consequently earn money for you.
“Transparency ethical behavior on the part of seller is sure to provide a competitive edge, whether at the customer end or any where in the supply chain.”
Building best sales staff is possible through skill advancement programmes. These programmes are a "must" to contribute to the bottom line as well as maintain one’s position as a serious player Sohil Kothari says he won’t be making any compromises when it comes to Fine Jewellery’s policy of staff training. For him a team of ill- informed, ill-trained sales staff can’t do justice to well-conceptualised, quality products. Sucheta Khandwala agrees with Kothari. As Hammer Plus deals in concept based spiritual jewellery, sales teams without proper knowledge of Indian culture, tradition, and values, would actually put their product at risk.
Being directly responsible for sales, sales personnel deserve special attention and training in customer handling. They are expected to be updated with product knowledge, market conditions and process orientation to get the vocabulary right in order to dose a sales deal convincingly. Commenting on this aspect, Navin Sadrangani explains, "The kind of sales personnel training required is on the lines of creating jewellery retail sales consultants in store. They should be able to comprehend what customer is looking for through conversation and questioning."
In a current situation, ‘getting a fair deal’ would be a
huge driver — guaranteeing product quality and the salesperson’s
strong knowledge to steer the customer towards the best product
to fit the budget could be a differentiator.
way business thrives on consumer confidence, so also an employee’s confidence increases if the employer has faith in their abilities.. Moreover, it becomes necessary to keep your staff’s morale high and provide them adequate training in keeping with the changing times. A procedure of grooming an employee doesn’t stop with professional training. The way you need honest and hardworking staff. they too need your faith and recognition.
In tough times, they look forward to motivation from you to deliver their best. You may not be thinking of reducing headcounts but t~e very fear of losing
job in a gloomy situation might force your staff to perform poorly. That is not good either for you or your staff. It is inevitable that tough financial situations lead salespeople and businesses to look at reducing costs to increase profit l"QaLgins, and that can potentially lead to unethical behaviour. Therefore, keeping yourself and your staff motivated irrespective of market conditions is the need of the hour.
Tune in to technology
Technology remains the most neglected area in jewellery. As a part of security programme, technology has been a long-time companion of jewellers. However; one will find little evidence of use of technology in day-to-day business transactions. Technology in customer relationship management (CRM) is considered a new opportunity. "Use it to provide information that shall assist the staff to sell more/convert more. Understand the CRM element that would get results", instructs Anaggh Desai.
"We use technology in the area of CRM to increase our efficiency and productivity, which helps to position our brands in the market", says Balaji, Marketing Head at Kirtilals.
Describing the tech savvy nature of Hammer Plus, Sucheta Khandwala observes, "Together with some of the most advanced jewellery manufacturing machines and techniques, we use a number of on-floor product movement software for better time management and increased productivity."
Says Fine Jewellery’s Sohil Kothari: "The implementation of new software helps to connect our entire delivery chain – from the production to end consumer and also been useful to handle quality related issues."
Design was a "zero investment" zone till date. Indian jewellers used to copy international designs in Indian style except a few chosen ones. However, it is better late than never. Jewellers are now beginning to take design seriously. The change in jewellers’-attitude is the direct result of a shift in consumer taste patterns.The possession of gold or diamonds is considered an investment. Now, Indian buyers’ horizon has broadened over the period, thanks to exposure to global trends through media and travel. There is a certain group taking shape within the larger Indian consumer group, and this group pays more attention to design. According to Navin Sadrangani, there is an audience that buys jewellery simply based on design, and then the similar tactics need to be used to communicate the design.
Sohil Kothari runs design and research cells in India and Hong Kong. He basically travels the world to study the latest trends and understand consumer needs. He observes, "With the socio economic changes in the country, Indian women have acquired an international taste. Corporate dressing also has a place for delicately designed jewellery, which the Indian women have started accepting as part of their office ensemble."
Prakash Chandra Pincha, Director, Kolkata-based Jewel India partly agrees with Kothari and Sadrangani. According to Chandra, the biggest share of sales is based on traditional basic designs but presented in a contemporary style. Some basic changes have appeared with the rise in the number of educated women, But still, the root to taste has not changed if we compare the percentage of sales of the so-called changed pattern. In the long run, jewellers need to provide well designed, quality products based on proper market research and with proper promotional and pas backing – thus providing a comprehensive package to the ultimate client.
Classical designs are heavy, intricate, and expensive, while the "impulse" or the "fashion" jewellery market demands light jewellery with clean lines. Traditionally, the two segments do not sit well next to each other. Some global jewellers have tried but failed to span segments under the same brand. In trying to overhaul their merchandise, companies have failed to gain new consumers, and at the same time lost the old ones. "In this context, the best bet would be to have a distinctive different brand under which to place the different segment offerings, and even within stores, segregate the offerings physically — ideally on different floors", suggests C Ravishankar.
Anaggh Desai opines that designs which have a high perception value but are cost effective and price friendly are the answer to increase sales. .